It looks so simple but it isn’t! If your mind is not 100% ready to take the trades when they present themselves to you, you’ll miss them, you’ll be just watching and will let them go without any apparent reason why, and then when you realize what you just did, your reaction is to get angry! Just to make you jump into an unplanned trade and lose… Prepare in advance, market is like playing chess, you have to look ahead for the next move.
2 – Always use STOPs
In case you don’t like to use physical stops, make sure you’ll be able to stop in case it breaks the limits you’ve set for that trade
3 – Anything can happen
Try to start the morning with a free state of mind so that you’ll be able “to listen” to the market.
4 – Always lower your trade size when you’re losing
If you make two losing trades in a row, lower trade size until you get in tune with the market again.
5 – Never turn a winning trade into a loser
That’s the reason why I like to take small portions of profit when market makes it available to me, I hate to see a winner turn into a loser, manage your trades well.
6 – Buy or develop a system and stick to it, don’t change it from day to day
Find a trading system that fits your personality and once you have it, if it gives you an edge, stick to it, don’t change it because it didn’t work on one or two days, otherwise you’ll keep changing systems forever and that means: losing money.
7 – Get out of losers
One of the most known market adages is: “Cut your losses and let your profits run.” Much easier said than done, but it’s very important that you do it, usually it’s much easier to do exactly the opposite… make sure you bear that in mind.
8 – Don’t worry about news
This one I like very much, the only thing news will do is to accelerate the targets, nothing else, most of the time, I completely trash the news and just follow what I see on my map.
9 – Monitor your progress, create your own trading journal
It is very important that you have a trading journal to track your success, so that you’ll be able to stop what you’re doing wrong and keep your strong strategies. I’ll talk about this in detail on my next post.
Hope this helps, happy trading!